Corporates need to help Asian-Australian leaders crack ‘bamboo ceiling’

Dumped by the Labor Party as a candidate for the south-west Sydney seat of Fowler at the last federal election, last week Tu Le won the 2022 Overall 40 Under 40 Most Influential Asian-Australian Award.

The Vietnamese-Australian community worker, legal-aid and solicitor was recognised for her powerful contribution to the Asian-Australian community.

Axed in favour of former NSW premier (and Northern Beaches resident) Kristina Keneally, Le’s dumping sparked a strong community reaction in Fowler that saw local independent Dai Le, a former refugee from Vietnam, win one of the safest Labor seats in the country on a 16% swing.

While these influential Asian-Australians have smashed the so-called “bamboo ceiling”, many more people with Asian backgrounds experience bias, discrimination and racism at work, particularly in Australia’s corporates.

According to a 2018 Australian Human Rights Commission report, Asian-Australian workers occupy a mere 3% of leadership positions, and 1.6% of chief executive roles, despite today representing over 17% of our population.

It is evident that some people of Asian ethnicity, many of whom top our university rankings, do not feel they belong in Australia’s largest corporations. As a result, they are quietly quitting faster than their counterparts.

At the same time, many are pushing for greater Asian-Australian leadership representation, having been spurred into action due to racist incidents against people with Asian backgrounds and inspired by Asian-Australians’ successes in parliament.

Australia needs to become a talent magnet

Undoubtedly, cultural diversity in leadership is good for sustainable business, and diverse teams and organisations are superior performers. Of more than 1,000 companies in 15 countries, McKinsey reported in 2020 that there was a 36% difference between the profitability of companies whose leadership teams ranked in the top 25% for cultural diversity and those in the bottom quartile.

Over the past decade, Australian corporates have gradually recognised that having diverse talent with Asian capability can support them in growing their businesses in Asia.

Today, Australian companies are experiencing severe talent shortages in high-growth industries such as technology. As such, embracing greater cultural diversity at work is becoming even more crucial.

Skilled migrants, which Australian companies desperately need to compete in today’s increasingly interconnected global world, will bring them diverse perspectives, thinking and ideas. Yet the same skilled migrants that Australia is looking to attract are also being wooed by nations such as Singapore, Germany, the UK and Thailand.

Employers in Australia can no longer be complacent and expect global talent to be attracted to Australia merely for its lifestyle opportunities. Instead, employers need to recognise the unique insights they bring and offer them long-term career opportunities.

Skilled migrants are ambitious, so they want career prospects and competitive remuneration. They may be reluctant to move to Australia if their experience is discounted as they are perceived to lack Australian work experience.

Further, many well-educated Australians, including those of Asian ethnicity, remain mobile and work overseas. More can be done to encourage the Australian diaspora to return home and contribute meaningfully to Australia’s longer-term prosperity.

Building more inclusive corporate cultures is the answer

So, what can Australian companies encourage culturally diverse talent to join and stay in their organisations and for all their people to survive and thrive?

Implementing diversity, equity and inclusion (DEI) programmes is becoming popular as external stakeholders, including investors and employees, push for greater visible diversity in organisations. As a result, more companies now have multicultural employee resource groups and HR-focused policies, procedures and KPIs designed to reduce bias in their processes.

However, leveraging diversity is challenging, as people naturally prefer to work with similar people. Therefore, companies need to do more than create more rules and regulations; they need to foster more inclusive work environments.

These are the three questions that leaders should be asking themselves:

1. Are our company’s purpose, values and lived behaviours aligned?

A lack of diversity in leadership may be a symptom of a broader organisational issue that requires exploring – a dysfunctional, toxic work culture. Research has found that some diversity initiatives, even though well-intentioned if not well thought through, can exacerbate the issues they are trying to resolve.

2. Could dysfunctional behaviours arising from toxic cultures be inhibiting improvements in leadership diversity?

A recent study by Donald Sull and Charles Sull in the MIT Sloan Management Review found that both women and racial minorities are more likely to experience toxic cultures than men and white employees. They suggest companies focus on their leadership, social norms and work design to address unhealthy work environments.

Social norms of corporate cultures or “the way things are done around here” can inhibit greater diversity. Moreover, in times of stress, they can lead teams and individuals to act in non-inclusive ways.

3. Do our people feel psychologically safe?

Psychological safety is a critical enabler in supporting greater collaboration and can lead to better performance by diverse teams. Leaders play an important role to create greater empathy and humility among team members.